IIFL Finance approves $686m capital raise led by Blackstone

The board of Indian non-banking lender IIFL Finance has cleared a primary capital infusion totalling Rs64.14bn ($686m) via a preferential issue.

Private equity funds managed by Blackstone will provide the bulk of the financing, committing Rs50bn ($535m) through a preferential allotment of compulsorily convertible preference shares (‘CCPS’).

The CCPS carry an 18-month conversion window from allotment, after which they will become equity shares priced at Rs602 each, matching the regulatory pricing threshold.

Alongside the institutional investment, company promoters Nirmal Jain and R. Venkataraman are contributing Rs12.6bn ($135m) via a preferential allotment of warrants.

Nirmal Jain said: “Venkat and I are investing ₹1,264 crores alongside Blackstone, which reflects our own conviction in the Company’s next phase of growth.

“Blackstone brings deep experience in building market-leading businesses in India, strong governance discipline, and a global perspective.

“The investment strengthens our balance sheet and gives us the headroom to scale our franchises, invest further in technology, and deepen our co-lending partnerships with banks, while staying disciplined on risk and capital.”

Anchorage Capital is taking up the remainder of the round through a Rs1.5bn ($16 million) primary equity purchase.

The non-bank lender plans to allocate the incoming funds toward improving its capital adequacy metrics, lowering funding costs, and accelerating credit disbursement within its gold finance division.

The management also intends to leverage Blackstone’s international infrastructure and operational capabilities across artificial intelligence, data, and technology.

The company stated this will aid the expansion of its secured credit books, bolster staff recruitment and retention, and strengthen the overall business.

Blackstone nominees are slated to join the company’s board, which IIFL Finance expects will lift governance and supervision standards while preserving its execution focus and entrepreneurial culture.

The transaction remains contingent upon statutory clearances and the approval of shareholders.

Blackstone India private equity chief investment officer and senior managing director Mukesh Mehta said: “We are pleased to invest in IIFL Finance, a leading retail lending platform in India with a strong franchise and commitment to serving underserved customers.

“Building great businesses has been central to our approach over more than two decades of investing in India, and we look forward to partnering with Nirmal, Venkat and the management team to support IIFL Finance’s continued growth.”